About Simple Budget Excel Template
A budget is a financial plan for a particular period. It is an estimation of monthly expenses and the purpose of providing a roadmap that the homemaker should follow. The budget is easy to maintain and has a daily tally of income and expenses. While budgets are useful for households, they are also necessary for larger companies, organizations, corporations, and governments which use budgeting for large spending and records.
A budget feels restrictive to some people, but it is a simple financial record that helps you to navigate your spending. A simple budget means you can keep track of your spending for future emergency use. If you use the budget to guide your spending, you’ll know where you’re spending too much and then allocate your future bills. Create a budget so you will be aware of your financial situation.
Budgeting in Excel
This spreadsheet helps you create a very simple budget. Begin by entering your monthly or yearly income. Then list your expenses, bills, and saving for that pay period. To calculate total savings subtract the total expenses from your income.
Types of Budgeting
Budget can be classified as per the needs of Household, Corporation, Organization, and Government.
1. Household Budget
A family budget is a record that summarizes a plan for a family’s finances, serving as a guide for how much you spent on various items and bills. You can prepare a family budget for a month and a year. Although there are plenty of consultants and applications available to help you develop your budget, the most important thing is that you come up with something that will work for you.
2. Operating Budget
The operating budget of the business involves funds related to operational activities. This includes production money, manufacturing cost, labor cost, administrative cost, working capital. The income flow includes the vending of the business.
3. Financial Budget
A business is always in need of long-term, medium-term, and short-term funds. The financial budget secures that the right types of funds are available whenever the company needs them. The target of the budget is to manage the inflows and outflows. Decisions like alliance and accession depend on the financial budgets of the companies.
4. Cash Flow Budget
A cash flow budget is more about managing the money of the business. The cash flow budget decides whether the accounts are payable or receivable timely. It ensures that the inflow of money is regular and timely. A cash flow budget is important as it helps to determine the period of cash shortage.
5. Master Budget
The master budget is the sum of the company’s total budget that includes the allotment of funds to different ventures of the business. Therefore, it estimates the value centres within the organization and assigns funds by considering different factors. The master budget is developed by different factors like operating expenses, income sources, sales, etc.
Importance of Budgeting
Budgets form an important part of any organization. The different types of budget ensure that the right amount of money is assigned to different departments. For instance, making wrong budgets can be fatal for the business as it can lead to inefficient use of resources. Based on the business requirements, a budget is must prepared for the smooth running of the organization.
- Budgeting helps you to control your spending- When you operate your income without budgeting you don’t have anything holding you back from spending money beyond your needs.
- Helps you in future financial contentment- It is good for future finances and keeps you away from overspending.
- Keeps you organized- It keeps your financial life easy without getting messed with your monthly bills, debt payment, and other expenses.
- To prepare for Emergencies- Life is full of unexpected things from hospital bills to home repair if you don’t prepare for these expenses then you won’t be ready when these emergencies take place.
- Helps you to Save Money- If you don’t have control over your spending then you have to immediately start Budgeting for future, emergency, and retirement use. Start investing the saved money in funds.